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Oil prices down as supply glut, trade war concerns weigh on markets

Uncertainty over the supply and demand balance of global oil markets have resulted in volatile yet range-bound recent trading

Reuters  |  Singapore 

Crude oil
Representative Image

dipped on Tuesday, easing after strong gains in the previous session when hopes that trade disputes between the and could be resolved buoyed global

Despite a softening of trade concerns, still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share.

U.S. WTI crude futures were at $63.26 a barrel at 0031 GMT, down 16 cents, or 0.3 percent, from their previous settlement.

futures were at $68.52 per barrel, down 13 cents, or 0.2 percent.

The dips came after a more than 2 percent rally on Monday during European and American trade hours.

"rose sharply (on Monday) as a weaker U.S.-dollar and easing concerns about the trade war saw investor appetite return," said.

"Reports that back-channel talks over the trade dispute between the U.S. and are ongoing helped soothe investor angst," it added.

Concerns of a prolonged trade dispute between the world's two biggest economies and uncertainty over the supply and demand balance of global have resulted in volatile yet range-bound recent trading.

"remain rangebound with WTI in the middle of the $60-$65 per barrel range that has largely held since January of this year," said William O'Loughlin, at Australia's

"U.S. had been rising for the past couple of months but the data released last week showed an unexpected draw. This week's data may be crucial for determining the direction of WTI," he added.

The American Institute is due to publish later on Tuesday while official data from the (EIA) is due on Wednesday.

have generally been supported by healthy demand as well as supply restraint led by the Organization of the Exporting Countries (OPEC).

However, soaring U.S. crude production , which has jumped by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is threatening to undermine OPEC's efforts to tighten the market and prop up prices.

The late last year overtook top exporter as the world's second biggest Only pumps more crude out of the ground, at almost 11 million bpd.

In a sign that remain ample, China's <600028.SS>, Asia's largest refiner, plans to cut Saudi crude imports in May by 40 percent, instead buying from alternative sources, after set higher-than-expected prices, a said on Monday.


First Published: Tue, April 10 2018. 06:41 IST